Tuesday October 30 2018, Daily News Digest

Synchrony Q3 Earnings

News Comments Today’s main news: SoFi caught with alleged misleading ads. The Motley Fool recommends LendingClub. Prosper performance update. Australia’s fintechs are beginning to make profits. Elevate Credit plunges from record low. Today’s main analysis: Loan growth at credit card issuers. Today’s thought-provoking articles: Down payment affordability by state. Crypto lending and the turbulent 2018 market. Do banks or fintechs do […]

Synchrony Q3 Earnings

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News Summary

United States

FTC puts student lenders on notice by citing misleading ads at SoFi (American Banker) Rated: AAA

SoFi has agreed to settle federal charges that it misled borrowers about how much they could save by refinancing their student loans. The charges were issued by the Federal Trade Commission, which warned other student lenders to steer clear of similar violations.

The commission voted 5-0 on Monday to issue the administrative complaint and accept the agreement with SoFi. The company, which agreed to stop exaggerating potential savings, was not required to pay a civil penalty.

According to the FTC, SoFi over the past two years has inflated — at times doubling — estimates of the average borrower’s savings from student loan refis. The San Francisco company, which in one ad claimed that SoFi customers save an average of $22,359, did so, in part, by excluding from its calculations borrowers who refinance their loans with longer terms and pay more over the lifetime of their loans, the agency said.

Online Student Loan Refinance Company SoFi Settles FTC Charges, Agrees to Stop Making False Claims About Loan Refinancing Savings (FTC) Rated: A

Online student loan refinancer SoFi has agreed to stop misrepresenting how much money student loan borrowers have saved or will save from refinancing their loans with the company, in order to settle Federal Trade Commission charges that it deceptively advertised inflated figures for more than two years.

According to the FTC, one online SoFi ad claimed, “Refinancing student loans saves $22,359 on average,” while another ad told readers to “Start saving on your student loans. Average monthly savings $292.”

6 Great Stocks Under $ 6 (The Motley Fool) Rated: AAA

LendingClub — $3.13

Peer-to-peer lending doesn’t get a lot of love on Wall Street, but it’s a win-win for folks looking to borrow money and risk-tolerant income investors willing to lend out their money in the chase for higher yields. LendingClub has had a rough first few years as a public company, and it wasn’t until just a few weeks ago that it settled up on Federal Trade Commission and SEC complaints stemming from company disclosures that ultimately cost its CEO his job.

The platform’s popularity continues to grow. Revenue rose 27% in LendingClub’s latest quarter, and loan originations rose 31% to hit a record $2.8 billion. Guidance wasn’t great. Profitability remains a challenge. The depressed stock has some serious upside as demand for peer-to-peer lending gains — pun intended — interest.

Prosper Performance Update: September 2018 (Prosper Blog) Rated: AAA

Highlights from the September report include:

  • In September, 61% of originations were rated AA-B as Prosper continues to reduce the risk profile of originations on the platform.
  • Dollar WA FICO for the month of September was 717, remaining flat month-over-month and increasing 10 points since Q3 2017.
  • Average loan size on the platform is approximately $13,300, approximately $280 lower since 2018H1. This decrease is driven by our continued focus on limiting loan amounts based on a borrower’s income and ability to pay.
  • WA Borrower Rate for September originations on the platform increased by 10 bps compared to August as the portion of originations rated AA-B decreased slightly.

Loan Growth at Credit Card Issuers (Peer IQ) Rated: AAA

American Express Q3 Earnings

Revenues at AXP grew by 9% YoY to $10.1 Bn to achieve record levels. Earnings grew by 22% YoY to $1.7 Bn. NII also grew 17% YoY to $2 Bn. AXP’s premium customer base saw record-low delinquency rates while the net charge-off rate increased slightly YoY to 1.7%.

Source: Peer IQ

Capital One Q3 Earnings

COF’s revenues were flat YoY at $7 Bn, but earnings grew by 36% YoY to $1.5 Bn. Growth in NII was modest at 2% YoY to $5.8 Bn. COF was the only issuer who saw a drop in the net charge-off rate by 20 bps YoY to 2.4%. COF also saw its provisions for loan losses decrease by 31% YoY driven by improving credit quality of the credit card and auto loan portfolios. This release in provisions consequently led to a 3% YoY drop in allowance for loan losses to $7.2 Bn on loan growth of 1% YoY.

Source: PeerIQ

Synchrony Q3 Earnings

SYF’s revenues grew by 9% YoY to $3.3 Bn. Earnings grew by 21% YoY to $0.7 Bn. NII grew by 9% YoY to $4.2 Bn. SYF had the highest net charge-off rate of 5% among all issuers, which stayed flat YoY. Loans grew by 14% YoY to $88 Bn. Provision for loan losses grew by 11% YoY and the total allowance for loan losses increased by 16% YoY to $2.9 Bn, slightly outpacing loan growth.

Source: PeerIQ

LendingTree Ranks Down Payment Affordability by State (Lending Tree) Rated: AAA

Key findings

  • Average down payment percentages for conventional 30-year, fixed-rate purchase mortgage offers stayed about the same from the second quarter to the third quarter, rising 0.03 percentage points (18.02% to 18.05%).
  • At the same time, average down payment amounts decreased nearly 10% in the third quarter, falling from $52,480 to $47,265.
  • The average loan amount offered to potential homebuyers fell around $28,000 from $285,903 in Q2 to $257,749 in Q3.
Source: Lending Tree

 

Source: Lending Tree

Average mortgage down payments drop in Q3 (Mortage Professional America) Rated: A

Average down payment amounts for conventional 30-year, fixed-rate purchase mortgage offers declined during the third quarter, while down payments as a percentage of the price stayed about the same, according to an analysis by LendingTree.

Average amounts fell by almost 10% during the third quarter, decreasing to $47,265 from $52,480. At the same time, average down payment percentages were steady from the second quarter, rising 0.03 percentage points to 18.05% from 18.02%.

The Credit Junction Secures $ 23 Million Equity Investment from Century Equity Partners (New York Business Journal) Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $23 million growth equity investment from Century Equity Partners (“Century”). Century focuses on making investments in lower middle market companies that have demonstrated value propositions to the financial services industry. This investment provides The Credit Junction with growth capital to expand its ability to provide financing solutions to Supply Chain America, as well as commercialize its proprietary data and risk analytics platform.

This marks the second meaningful financing announcement for The Credit Junction in recent months, as the company secured a $150 million credit facility from MidCap Financial in March 2018.

Surge in Mobile Fraud and Phishing, Balancing Customer Friction and Fraud Prevention Are Biggest Challenges for Businesses (PR Newswire) Rated: A

IDology today released its Sixth Annual Fraud Report, confirming the growing importance of balancing customer friction and fraud prevention, cited by businesses this year as the number one challenge in fighting fraud. The report reveals a surge in mobile and phishing fraud schemes, a focus on artificial intelligence and machine learning as the growing trends in identity verification, and the strategic role identity verification plays in the quest to gain a competitive edge, retain and attract customers, and increase revenue.

Phishing and Mobile Fraud Surge

Credit card fraud and account takeovers remain the most widespread forms of fraud, but phishing schemes and mobile fraud have surged.

  • The prevalence of mobile fraud surged dramatically with an increase of 117% over the previous year (one of the highest year-over-year increases among the fraud vectors measured this year in the survey). The number of businesses that feel their industry is least prepared to detect and prevent mobile device attacks increased 167% compared to a year ago.
  • Businesses reported a 63% increase in mobile fraud. All types, including porting, spoofing, hacking and fraudulent change events, are on the rise. Caller ID spoofing increased by 74%, porting by 69% and SMS interception by 50% compared to 2017.
  • Phishing, which can be linked to 93% of last year’s security breaches and has steadily risen each year, increased in prevalence by 66%.
Source: IDology

ABS Professionals Demonstrate Enthusiasm Despite Rising Interest Rates, Survey Finds (ABL Advisor) Rated: A

Capital One survey conducted at ABS East 2018—a conference convening professionals from across the asset-backed securities (ABS) industry—found that most respondents (94 percent) expect buy-side interest in ABS to increase or remain the same in the coming year while only 6 percent expect it to decrease.

Of the challenges facing the industry, only 15 percent of ABS professionals elected increases in interest rates. For the majority of respondents, uncertainty around regulatory requirements (30 percent), increased credit risk (25 percent) and increased competition (24 percent) pose the greater challenges for their businesses over the next 12 months.

State Regulators File Second Lawsuit Opposing OCC Fintech Charter (National Law Review) Rated: A

The Conference of State Bank Supervisors (CSBS) has filed a second lawsuit in D.C. federal district court to stop the Office of the Comptroller of the Currency (OCC) from issuing special purpose national bank (SPNB) charters to fintech companies.  A similar lawsuit was filed last month in a New York federal district court by the New York Department of Financial Services.

Stephanie Klein of Braviant Holdings (Lend Academy) Rated: A

While the non-prime consumer lending space is less competitive than prime there are many companies doing interesting things. We heard the recent news of US Bank entering the space and just today I read that the CFPB intends to change the rules for payday lenders in the new year. It is certainly a dynamic space that will be going through lots of changes in the near future.

Our next guest on the Lend Academy Podcast is Stephanie Klein. She is the CEO of Braviant Holdings, a non-prime lender that has been around since 2014. Stephanie actually has quite a long history in the non-prime space going back more than a decade to her time with Al Goldstein’s (the CEO of Avant) first lending company, CashNetUSA.

Online subprime lender Elevate Credit plunges from record low after earnings (Market Watch) Rated: AAA

Elevate Credit Inc. ELVT, -32.13% closed at a record low Monday, then plunged more than 20% in after-hours trading following an earnings report that included lowered annual guidance and myriad concerns that cropped up in the quarter. Chief Executive Ken Rees called the quarter “unexpectedly challenging” in the announcement, and then ticked off the reasons for the performance.

Elevate, which offers loans online to subprime customers through different products, reported a third-quarter loss of $4.2 million, or 10 cents a share, on revenue of $201.5 million, after reporting a profit of a penny a share on sales of $172.9 million a year ago. Analysts on average expected earnings of 13 cents a share on sales of $200.2 million, according to FactSet.

The company chopped its annual forecast, which previously called for earnings of 55 cents to 90 cents a share on sales of $790 million to $810 million. Now, Elevate expects earnings of 23 cents to 32 cents a share on sales of $790 million to $795 million in 2018. After shares closed at an all-time low of $6.35 Monday, they fell to about $5 in after-hours trading.

Equifax launches real-time Open Banking ID checks (Peer2Peer Finance) Rated: A

CREDIT referencing agency Equifax has teamed up with Open Banking technology provider consents.online to allow it to match customer data and transactions in real time.

It will be used within Equifax’s bank account verifier system that lets lenders compare sort codes and account numbers to its own database.

Users will be able to match identity information such as the consumer’s name, address and date of birth with transaction data provided through Open Banking, helping them verify who someone is faster and help avoid fraud.

5 Ways Online Loan Lenders are Changing the Financial Landscape (The Libertarian Republic) Rated: A

Perhaps you didn’t know that about 80 percent of American households are in some form of financial debt.

  1. Fast Access to Credit

Traditional banks have a bad reputation for playing hardball with loan applicants. Borrowers have to fill out more than a couple of forms and wait for days, weeks even, to get an approval. Never mind a simpler clerical error can get your request turned down.

  1. Credit Process Automation

One of the reasons traditional lenders take ages to approve and disburse credit is that they have to manually verify borrowers’ details.

  1. Introduction of New Lending Models

You don’t just walk into any bank or credit union and apply for a loan.

  1. Bad Credit? No Problem

The only other thing that is certain besides death and taxes is a traditional lender turning down a borrower with poor credit.

  1. Millennials Are Having Their Way

Being a millennial is a full-time job – with no paid overtime. From having people label them needy and entitled to being the objects of hate for older generations, it’s tough being a millennial.

Money20/20 Las Vegas: Wealthfront’s Freemium Tool Shows How Robo-Advisors Can Capture Market Share from Incumbents (The Fintech Times) Rated: A

At Money 20/20 in Las Vegas, Wealthfront announced it is opening up its financial planning service to anyone for free. The freemium service is currently in beta and will be available by the end of this year.

Heike van den Hoevel, Senior Wealth Management Analyst at 

The U.S. Financial Industry Could Be More Innovative. But Should It? (Barrons) Rated: A

American banking is apparently just a bit too boring, the Federal Deposit Insurance Corp. has concluded. Its chairwoman, Jelena McWilliams, told the American Bankers Association conference that the agency will open an innovation office.

This is related to, but slightly different from, the tack taken in July’s report from the Treasury Department that laid out more than 80 recommendations to help nonbank financial firms. The idea then was that nonbank financial firms, which get called fintechs for marketing reasons, don’t get a fair shot because of the regulatory advantages enjoyed by regular old banks.

The message was that regulation was stifling innovation by not regulating nonbank financial firms. Companies like Square, for instance, should be able to get banking charters if they want. (Which they do.)

McWilliams seems to see the problem from the perspective of banks rather than from nonbanks and comes to what looks like a contradictory position: Nonbank fintechs are innovating like crazy and banks aren’t keeping up. But there’s nothing exactly contradictory about saying nonbanks could be doing more things under a more accommodating regulatory regime and that banks aren’t innovating as fast nonbanks.

Walker & Dunlop Selects SS&C to Support $ 78 Billion Loan Portfolio (SS&C) Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Walker & Dunlop has selected SS&C as a technology and services partner to deliver a highly-automated solution for loan servicing, asset management, insurance compliance, document management and investor reporting. This partnership reinforces SS&C’s commitment to the agency/multifamily market.

SS&C will provide cloud-based software and outsourcing services including Precision LM for loan servicing, and AWD, an enterprise business process management system, which combines automation, workforce optimization and digital transformation for insurance compliance and renewals. SS&C’s integrated solution supports a broad range of commercial/multifamily loan programs, such as Freddie Mac (including Freddie K securitizations), Fannie Mae, HUD, Bridge, Life Company and more.

Commerce Bank Supports FinTech Startups through Partnership with SixThirty (Business Wire) Rated: B

Commerce Bank announced today a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. SixThirty targets investments in late-seed stage startups that have a product and market traction and are starting to earn revenue. Its portfolio and pipeline represent some of the most innovative and promising FinTech ideas from around the world.

Through its strategic relationship with SixThirty, Commerce will provide hands-on training and mentoring to the companies selected to take part in SixThirty’s business development program. Commerce team members will also participate in networking opportunities with leading technology and financial services institutions and some of the brightest and most innovative minds in the country. Additionally, Commerce will have the ability to make direct investments in ideas that present strategic, long-term opportunity to the business and the needs of our customers.

The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Jianpu Technology Inc. (Business Wire) Rated: B

The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class action lawsuit against Jianpu Technology Inc. (“Jianpu” or “the Company”) (NYSE: JT) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.

Investors who purchased the Company’s shares pursuant to and/or traceable to the Registration Statement and Prospectus issued in connection with Jianpu’s initial public offering on or about November 16, 2017, are encouraged to contact the firm before December 24, 2018.

United Kingdom

The House Crowd opens £15m property development project to investors (Development Finance) Rated: AAA

A£15m crowdfunding property development project in Altrincham from the House Crowd has opened for investment.
The property crowdfunding and P2P lending platform is scheduled to complete the land purchase in November and start the build in January.

The House Crowd gives retail investors the chance to make an investment – starting from £1,000 – in property developments and builds the properties itself.

The site is in Altrincham town centre and will result in a total of 40 units comprising 31 apartments, eight townhouses and one commercial unit (pictured above).

P2P sector queries data used to justify tabled investor restrictions (Peer2Peer Finance) Rated: A

The industry gathered at a Peer-to-Peer Finance Association (P2PFA) event held in London last Wednesday, to discuss the Financial Conduct Authority’s (FCA’s) review of the sector ahead of the 27 October deadline for feedback.

The most contentious element of the FCA review was its proposals to introduce categorisation and appropriateness tests for P2P investors. Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P.

At the P2PFA event, which was held under Chatham House rules, stakeholders suggested that the FCA had misinterpreted the findings of a 2016 survey conducted by the Cambridge Centre for Alternative Finance, which collected responses from investors. It was suggested that the FCA had used these findings as justification for the proposed marketing restrictions.

nCino to Present at Upcoming Fintech Industry Conferences (PR Newswire) Rated: B

nCino, the worldwide leader in cloud banking, today announced that members of the company’s leadership and market development teams will speak at two upcoming fintech industry conferences.

Nathaniel Ward, nCino’s regional vice president of market development for EMEA, will be speaking at MoneyLive Nordic Banking 2018 in a session titled: New Models in Banking: The Impact of Digitalisation. This session will explore the benefits and opportunities of cloud banking, and how to enable a workforce through digital transformation. This session will take place on 8 November at 09.45 at the Copenhagen Marriot Hotel.

Later in November, nCino’s chief innovation officer, Nathan Snell, will participate in a fireside chat at LendIt FinTech Europe 2018. In a session titled: The Rapid Pace of Product Launches in the Digital Age, Snell will discuss AI’s potential impact on the future of banking.

International

Crypto Lending Platforms Navigate Turbulent 2018 Market (Forbes) Rated: AAA

The surge of cryptocurrencies and “hodling” investment strategies of 2017 precipitated a flood of crypto asset-backed lending platforms coming to market.

The idea is a simple – take the concepts and models of traditional asset-backed lending and implement them with new “crypto assets” like Bitcoin and Ether. So if cryptocurrency miners or hodlers need short term access to fiat currency to pay expenses but don’t want to liquidate their positions, they can take out loans against the value of their crypto assets.

As such, platforms like ETHLend, SALT Lending, Nuo Lend and a plethora of others provide an alternative vehicle for investors who want to simultaneously hold and use their cryptocurrency.

Nexo Shares Positive Testimonials From XRP Users One Week After Launching Lending Service (Blokt) Rated: A

Nexo writes that it has received a huge inflow of corporate as well as individual XRP users who sought Nexo loans by keeping their crypto holdings as collateral. The loans ranged between $1,000 to $2,000,000. The service provider goes on to suggest that it is humbled as well as thrilled by the recognition it has received from the XRP community. The firm went on to share some testimonials by clients.

Australia

Australia’s fintech startups are starting to make profits (Business Insider) Rated: AAA

Australian fintech revenues are up 2.25 times and more of the startups have hit profitability as the local sector matures, according to the latest EY Census released at the FinTech Australia Intersekt conference.

Almost one in five (19%) fintech companies are now profitable with those aged three years or older now making up 43% of the local industry, up from 31% last year and just 20% in 2016.

The 2018 EY FinTech Australia Census, now in its third year, paints a picture of a sector now established and coming into its own as an alternative within the financial services landscape.

Forget flower crowns, personal loans are the latest wedding trend, says RateSetter (Mozo) Rated: A

From eco friendly decor to cupcake tiers, there’s always a new wedding trend on the rise. But according to recent research by peer-to-peer lender (P2P), RateSetter, low rate personal loans are also becoming many couples’ wedding essential.

A big reason loved up couples are opting for personal loans to help pay for their big day is to minimise credit card debt – 40% of RateSetter customers admitted to have taken out a personal loan to avoid using their plastic.

Contrary to the popular belief that men are not as involved in wedding planning, the data revealed that men were 66% more likely to take out a personal loan, compared to women (34%).

India

Banks or FinTechs – Who Does a Better Job for Business Loans? (Entrepreneur) Rated: AAA

Budding entrepreneurs with revolutionary business ideas (usually) need financing to keep their operations running. Banks have encouraged the growth of small-scale industries with access to credit, but the supply cannot keep up with the demand. Enter: Financial technology companies, aka FinTechs.

The global FinTech industry is maturing rapidly – with over $41.7bn invested in just the first half of 2018. Part of those deals was for FinTech lenders, who have supported the trend of industrialisation by granting business financing to those who were denied from traditional banks.

Asia

In brief: P2P lender PeopleFund raises $ 11m from Kakao, 500 Startups, more (Tech In Asia) Rated: AAA

PeopleFund, Korea’s fast-growing financial technology platform that connects borrowers and investors, has secured US$11M in series B funding.

The funding was led by KakaoPay, a subsidiary of Kakao that allows payments within Korea’s popular chatting app, KakaoTalk.

Returning investors included Dayli Financial Group, 500 Startups, and D3 Jubilee.

Authors:

George Popescu
Allen Taylor

Thursday April 5 2018, Daily News Digest

Thursday April 5 2018, Daily News Digest

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-2. dv01’s Q1 securitization volume hits $2.58B. Revolut releases open API. RainFin acquires stake in 4AX. Today’s main analysis: International P2P lending volumes for March 2018. Today’s thought-provoking articles: Trends on millennials and money. A tale of two fintech sectors. Amazon could become the third largest […]

Thursday April 5 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-2 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-2 (“SCLP 2018-2”). This is a $544.6 million consumer loan ABS transaction.

This transaction represents SoFi Lending Corp.’s (“SoFi” or the “Company”) 14th rated securitization collateralized by a portfolio of unsecured consumer loans. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-2

Class Preliminary Rating Initial Class Principal
A-1 AA (sf) $277,700,000
A-2 AA (sf) $127,900,000
B A (sf) $75,000,000
C BBB (sf) $64,000,000

DV01’S Q1 SECURITIZATION VOLUME TOPS $ 2.58B, ENCOMPASSING NINE DEALS FROM SIX ORIGINATORS (DV01), Rated: AAA

dv01 closed out Q1 with nine new securitizations, totaling $2.58 billion in total issuance. This represents a 141% increase from last year’s Q1 volume, which totaled $1.07 billion.

Deals were originated by six different lenders, including Prosper, Upgrade, LendingClub, CommmonBond, SoFi, and Marlette. Three of the deals (UPT I 2018-1, UPT I 2018-2, and CLUBC 2018-2) were trust certificates. dv01 was loan data agent on eight of the nine deals; loan level data and reporting tools for all the deals are accessible through dv01’s Securitizations portal.

Millennials and Money: 30+ Trends Financial Marketers Need to Know (The Financial Brand), Rated: AAA

Here are over 30 facts, statistics and insights about Millennials banks and credit unions need to know to serve this essential market segment more effectively.

  •  Millennials want to learn how to feel financially empowered. Nearly three quarters say they feel confident in their ability to make financial decisions, but they still want to learn more. 92% believe that being educated on personal finances is important. (Source: CSpace)
  • Millennials are so serious about their financial health that more than a third (34%) have a written financial plan, much higher than the 21% of Gen X and 18% of Baby Boomers who have done the same. However, 78% rarely or never make spreadsheets for their finances, and 35% say they’d rather vomit than make a spreadsheet to help them manage their finances. (Sources: Schwab, Varo Money)
  • Maybe Millennials don’t need help from real human beings. With 85% saying artificial intelligence could help them better manage their finances, banks and credit unions should use digital tools and AI to deliver the financial insights they crave. Nearly half of Millennials say they want their bank to be able to anticipate their financial needs and offer them timely advice (Sources: Varo Money, Segmint).
  • Millennials’ top savings priorities are emergency funds (64%), retirement (49%), and buying a house (33%). Nearly half already have $15,000 or more in savings, and 16% have a whopping $100,000 or more in savings. (Source: Bank of America)
  • When it comes to saving, Millennials still have significant headwinds: three in four college graduates today will have a heavy student debt load. (Source: ABA)
  • The average graduate from the university class of 2016 has $37,172 in student loan debt, up 6% from the prior year. (Source: Student Loan Hero)
  • Student loan debt is such a burden that 70% of Millennials say that financial circumstances were a key consideration in deciding whether or not to go to college. (Source: Harvard)

Publicly Listed Fintech Companies – a Tale of Two Sectors (Lend Academy), Rated: AAA

(KFTX) is a good place to start.

Since inception in June 2016, the index has returned 46%, outperforming the broad market S&P 500 by a whopping 24%, and even the tech-heavy NASDAQ by a meaningful 9%.

Source: Lend Academy

Amazon could become the third-biggest US bank if it wants to: Bain study (CNBC), Rated: AAA

Amazon could rival the nation’s big banks in as few as five years, capitalizing off its digital prowess and massive consumer base, according to a Bain & Company report.

Pushing customers toward a co-branded banking account also allows Amazon to cut down on transaction costs, Bain said.

Amazon could – according to Bain calculations – avoid more than $250,000,000 in credit card interchange fees every year if finds a bank willing to partner on checking accounts.

Source: Bain & Company

Why Amazon won’t enter the advice market (Investment News), Rated: A

Despite what many see as the inevitability of tech giants entering the financial advice business, the economics of doing so — as well as the intensely regulated nature of the business — make their entry unlikely, according to a new report from Cerulli.

The Boston-based research firm says that “companies like Facebook, Amazon, Apple, Netflix and Google (FAANGs) have the tools and data to excel, but face significant obstacles that will likely preclude their entry,”

One major obstacle, Cerulli says, is the relatively small size of the market. The firm estimates that the “digital advice opportunity segment” represents only about 12% of investors, or a segment “that would be difficult to scale to be of strategic interest to the world’s largest technology providers.”

The Credit Junction Secures $ 150 Million Credit Facility from MidCap Financial (Business Wire), Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $150 million credit facility from MidCap Financial, a leading capital provider to the middle market specialty finance industry. The facility strengthens and expands The Credit Junction’s ability to deliver comprehensive capital solutions to businesses across the United States.

The Credit Junction combines traditional credit metrics with data intelligence and partners with business owners to deliver asset-based financing alternatives unique to the needs of each borrower. Since its launch in May 2015, The Credit Junction has helped businesses across the country achieve their growth objectives while supporting job creation and development in the communities they serve.

Real Estate Investment Platform, Sharestates, Changes the Game with User Experience (UX) (PR Newswire), Rated: A

Sharestates, an online real estate investment platform, announced today the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry.

Sharestates’ unique solution was designed by the company’s development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one stop shop” in real estate financing.

Banking Disruptors: Peer-to-Peer Lending and Payments (The Motley Fool), Rated: A

Peer-to-peer lending platforms such as Prosper and LendingClub (NYSE:LC) have changed the way people can borrow money, and apps such as Venmo and Zelle have made it easier and cheaper to send money.

In this segment from Industry Focus: Financials, analyst Michael Douglass and Motley Fool contributor Matt Frankel talk about the ways that technology is disrupting big banks, and what this trend could mean to the banking industry.

How Affirm Personal Loans Can Help You Finance Smaller Purchases (Student Loan Hero), Rated: A

The average student loan payment is $351. Between such a high monthly payment and rent, finding the money to furnish your home or buy a new computer can seem daunting.

If approved, you can now shop. When you’re ready to make a purchase, you can enter the total from your online shopping cart on Affirm’s site. You then choose an amount between $50 and $10,000. You’ll be provided virtual card information to complete the purchase. With some partner retailers, you might select Affirm at checkout instead.

LendingTree Launches Credit Analyzer, a Free Credit and Debt Analysis Tool (Lending Tree), Rated: A

LendingTree, the nation’s leading online loan marketplace, today announced the launch of its Credit Analyzer, a free credit and debt analyzer tool, which was created to help consumers avoid common credit mistakes, improve debt management skills and find the right financial products for their needs.

Credit Analyzer is a free tool that provides a deeper, instant analysis of consumers’ credit and debt situations and offers personalized recommendations based on individuals’ financial goals. The user experience is designed to make it easier for consumers to understand the most important factors that impact credit scores.

 

What will the financial services industry look like in five years? (Lend Academy), Rated: A

This article briefly touches on many of the themes being explored at our LendIt Fintech USA 2018 conference, which is now just days away:

Audits Will Go the Way of the Dodo Bird

The protocol of trust is here to stay, and it’s going to disrupt everything.

While the blockchain has not rendered audits unnecessary yet, I believe we’ll see it happen within the next five years.

Smart Contracts Are In, Long, Paper-Intensive Financial Processes Are Out

As I write this, Lending Robot is raising a private round of growth capital. The closing process, called “papering” for very obvious reasons, is just as onerous and Microsoft Word-oriented as I remember it back in the early 2000s when I was a young VC.

Fintech is Everywhere

Fintechs are enhancing the customer experience along four axes: choice, price, convenience, and predictability. They are meeting the needs of educated, aware, demanding consumers and they are attacking traditional financial institutions at every angle.

 

Five Things Fintech Startups Must Do In 2018 To Get Noticed, Adopted And Funded (Forbes), Rated: A

Here are five things the winners nailed that newcomers must do to compete:

  1. Build a seamless digital customer experience (CX) customized to each set of eyeballs, across platforms — plus, make financial services ubiquitous, instead of an unfortunate necessity.
  2. Streamline their lead generation and nurturing through automation, machine learning and AI, plus intelligent CRM throughout the customer journey. This powers faster, more accurate processes like loan origination, mortgage underwriting and credit application decisions, among others.
  3. Instead of being scared of increased regulation, embrace it as a driver of innovation.
  4. Upend an established Wall Street business model both by undercutting fees and over-delivering on performance.
  5. Find novel, values-driven ways to increase millennial participation in financial services.

Financing Small Businesses- 6 Tips For Finding An Online Loan (Bizztor), Rated: A

Online business loans are a popular option for financing small businesses. Over the years more small business owners have been turning to online lenders as banks have cut down on loans to smaller businesses.

With the assistance of technology and algorithm, online lenders are able to assess conventional credit standards like cash flow and personal credit score.

DriveWealth Raises $ 21M in Series B Funding (Finsmes), Rated: A

DriveWealth Holdings, Inc., a Chatam, N.J.-based fintech company, closed a $21m Series B funding.

The round was led by Raptor Group Holdings, SBI Holdings, Inc, and Point72 Ventures, LLC, as weel as existing investors Route 66 Ventures.

The company intends to use the funds to develop its technologies and scale its business.

Mosaic Readies New Solar Loan Deal (Global Capital), Rated: A

The San Diego-based company filed documents with the Securities and Exchange Commission on Monday for Mosaic Solar Loans 2018-1. The ABS-15G forms name Deutsche Bank and BNP Paribas as banks on the deal.

The transaction, Mosaic Solar Loans 2017-2, was priced at 185bp over interpolated swaps for the senior class, yielding 3.854%. Energy related ABS such as solar and Property Assessed Clean Energy (Pace) deals were heavily subscribed throughout last year, with strong issuance of residential Pace bonds and the first ever issuance of commercial Pace ABS from Greenworks Lending.

Laurel Road And Darien Rowayton Bank Officially Rebrand Under Integrated Laurel Road Name (PR Newswire), Rated: B

Laurel Road, an online lender and FDIC-insured bank, officially announced today that Darien Rowayton Bank and its national online lending division will rebrand under the integrated national Laurel Road brand. The new, unified Laurel Road brand represents a deep understanding of its customer base, best-in-class technology and industry-leading compliance and risk management.

Bankrupt Payday Lender Can’t Move Pa. AG’s Suit To Texas (Law 360), Rated: B

Think Finance LLC, a financial technology firm that critics say uses Native American tribes to skirt payday lending laws, failed to convince a Pennsylvania federal judge on Tuesday to move an action brought by the state’s attorney general to Texas, where it has filed for bankruptcy.

The company has been hit with lawsuits over its alleged role in several “rent-a-tribe” schemes, where a high-interest lender affiliates itself with a Native American tribe to shield itself from legal challenges.

Sarasota-Manatee ranks last for millennials buying homes (Sarasota Herald-Tribune), Rated: B

Millennials rank as the key target in the economic development world setting sights on future prosperity. A new study casts a pall over efforts to build the Sarasota and Manatee population of this prized demographic. Out of the largest 100 U.S. metropolitan statistical areas in the country, Sarasota-Manatee ranked dead last among cities favored by millennial homebuyers.

The study, conducted by LendingTree, focused on the percentages of all loan requests to the online loan marketplace that came from millennials. That figure for Sarasota fell far from top-ranked Des Moines, Iowa — 17.9 percent versus 42.4 percent. Fort Myers ranked just above Sarasota, with 19.8 percent.

The Online Lending Policy Institute (OLPI) Appoints Deputy Director (Lendit), Rated: B

Robert J. (Bob) Mullenbach, CRCM, Managing Director – Compliance Division Deputy at ProBank Austin – has been appointed as the Online Lending Policy Institute’s (OLPI) new Deputy Director. Mr. Mullenbach brings 25 years of regulatory compliance experience in billion-dollar financial institutions, regional and community banks, fintech’s, and leading consulting firms. In his current position, Bob audits clients on the myriad of regulatory requirements associated with consumer/commercial lending, bank secrecy act/anti-money laundering, privacy, and non-deposit investment products.

Microloans offer needy a better alternative (The Columbus Dispatch), Rated: B

Central Ohio chapters of the St. Vincent dePaul Society, an international charity run by Roman Catholic volunteers, give needy folks a better option through the society’s microloan program. Information is available through the organization’s website at svdpcolumbus.org.

Anyone of any faith who needs up to $500 for car repairs, school, home repairs or medical bills, can apply for a quick loan with a low interest rate and 12 to 15 months to pay it off.

Contrast that with the typical payday-loan operation, which loans a couple-hundred dollars and demands payment in two weeks. Many borrowers who are strapped enough to go to such a lender in the first place can’t pay it back that quickly. This leads to loans on top of loans, with tacked-on fees that can lead to an effective interest rate of nearly 600 percent.

SunTrust teams with fintech to offer loans for HVAC upgrades (American Banker), Rated: B

SunTrust Banks in Atlanta is teaming up with another fintech upstart to expand its reach in consumer lending.

The $202 billion-asset company said Wednesday that it has struck a partnership with the online lender Microf to offer point-of-sale loans to homeowners looking to replace aging residential heating, ventilation and air conditioning systems.

SunTrust will hold the loans on its books and a pay a fee to Microf for the referrals. Microf, based in Albany, Ga., offers the loans through its nationwide network of HVAC contractors.

United Kingdom

Revolut unleashes open API to all customers (Fintech Futures), Rated: AAA

APIs and open banking are hotter than a freshly tarmacked road in summer, and Revolut joins the mad-for-it crowd.

On its blog, the bank, which was launched in mid-2015 and offers a money transfer app, says account owners can generate sandbox and production keys, and set whitelisted IPs as an “extra layer of security”.

Away from these API days, the firm adds that over the last few months it’s been making updates to its business accounts.

New fintech fund could boost P2P sector (Peer2Peer Finance), Rated: A

At a time when investment trusts such as Victory Park Capital Specialty Lending have signalled a shift away from P2P opportunities, Augmentum Fintech’s investment adviser has hinted that P2P lenders could be included in the portfolio.

Augmentum Fintech was launched by Augmentum Capital, a venture capital (VC) firm backed by Lord Rothschild’s RIT Capital Partners, last month. The VC firm already had a 7.4 per cent holding in P2P giant Zopa worth £18.5m that has been transferred into the investment company portfolio and its founder Tim Levene, who is acting as investment adviser to Augmentum Fintech, said that the firm is well geared to the P2P sector.

FCA reveals it intervened in Collateral administration to protect investors (Peer2Peer Finance News) Rated: A

THE FINANCIAL Conduct Authority (FCA) has revealed that it intervened in the administration of Collateral because the peer-to-peer lender failed to seek its approval when it appointed an insolvency practitioner.

Wigan-based Refresh Recovery was selected by Collateral when the company shut down in February but it was revealed on Tuesday that the City watchdog was looking to appoint a different administrator.

“The Collateral companies were required to obtain the approval of the FCA when appointing an administrator,” the FCA said in a statement on Wednesday.

ISA countdown: The latest IFISAs on the market (Peer2Peer Finance News), Rated: A

March saw the introduction of tax wrappers from peer-to-peer property platforms The House Crowd and Safe as Houses, while EasyMoney, part of Sir Stelios Haji-Ioannou’s easy family of brands, launched its second IFISA offering.

Safe as Houses

The Safe As Houses ISA, which invests in loans made to Safe as Houses Group to develop, regenerate and sell on distressed properties, offers investors a return of six per cent.

The IFISA has a five-year term and requires a minimum investment of £5,000.

The House Crowd

The House Crowd’s IFISA invests in secured P2P loans and property development investments and offers a target return of seven per cent.

The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio.

Investors will get a fixed return paid in twice a year in October and April.

EasyMoney

The latest IFISA to hit the market before the deadline came from EasyMoney, offering target returns of 7.28 per cent. This eclipses the 4.03 per cent returns offered by its first product that launched in February.

The P2P lending platform said its new ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, limited to 75 per cent loan-to-value (LTV).

MINOR INVESTOR: An Innovative Finance Isa with a 7% rate is a tempting idea but tread carefully in the investing Wild West (This is Money), Rated: A

Only the peer to peer lending element can be included in an innovative Isa, not the equity version where investors take a stake in a company.

Obviously, innovative Isas don’t qualify for the savings element of the Financial Services Compensation Scheme that protects up to £85,000 per licensed bank.

Crucially, however, neither do they get the FSCS investing element that covers up to £50,000 in case your investing platform goes bust and hasn’t done what it is meant to with your money.

European Union

Robo advisors and the Data Revolution (GDPR) (AltFiNews), Rated: AAA

With just a month to go until the General Data Protection Regulation (GDPR) is implemented throughout Europe in May. We look at how the new regulatory regime will affect the nascent Digital Advice industry. Some of the upcoming regulatory changes issued from the EU and its commissioners should be positive for fintech asset managers.

With a clear focus on transparency, robo-advisors should look forward to the new era of information portability and openness.

The digital advice sector has from inception attempted to gain a competitive edge with clear transparent product engineering and pricing, but it won’t all be plain sailing and there may be headwinds ahead.

BANCO BNI EUROPA grows significantly in 2017 and attracts equity investor (Fintech Finance), Rated: A

2017 was once again characterized by the significant growth of Banco BNI Europa’s activity, increasing 41% in assets (from € 362M in 2016 to € 509M in 2017), 16% in customer deposits (from € 262M in 2016 to € 305M in 2017) and 379% in banking income (€ 2,8M in 2016 to € 13,2M in 2017). 

Net income reached € 2.3M, increasing regulatory capital to € 23.3M and the solvency ratio comfortably above the statutory limit at 13%.

International

International P2P Lending Volumes March 2018 (P2P Banking), Rated: AAA

Milestones achieved this month (overall volume since launch):

  • Landbay reached 100M GBP
  • Estateguru reached 50M EUR
  • Linked Finance reached 50M EUR
Source P2P Banking

Banking at a Tipping Point as Fintech Drives Change (Cash Lady News), Rated: AAA

According to Citigroup consumer banking currently generates around $870bn in revenues across Europe and North America, with digital innovators accounting for just 5% of that total. But if the report’s predictions are correct, by 2023, disruption by fintech companies will account for 17% of a total earnings pot of $1.200bn

Follow the Money

CitiGroup cites figures showing that global investment has risen from around $0.5bn in 2019 to just under $20bn today. And most of that investment – Citigroup puts it at 70% is focused on the key areas of personal and SME banking.

Read the full report here.

ROSCAcoin: A Self-Regulating, Autonomous and Decentralized Financial Platform for the Unbanked (BTC Manager), Rated: A

ROSCAcoin is a new decentralised autonomous and self-regulating platform built on the Ethereum blockchain. The project aims to develop an innovative financial infrastructure that allows creating solutions for people with little or no access to financial services. ROSCAcoin is set upon an ancient model of borrowing very popular in third world countries.

ROSCA, or Rotating and Saving Credit Association, is defined by a method of borrowing where a group of individuals agree to cooperate for saving and borrowing purposes within a pre-established period; is also a form of peer-to-peer banking and peer-to-peer lending. ROSCAcoin strives to introduce this method using the blockchain technology.

The platform is powered by its own currency RCA, which will be the engine of the whole ecosystem. By using smart contracts, ROSCAcoin is trying to build the ultimate financial solution for the unbanked.

“Stars are Aligned” for an Higher US Dollar Against the Swiss Franc (PoundSterling Live), Rated: B

The Dollar has risen 4.4% versus the Swiss Franc since mid-February and could be about to accelarate the move suggest analysts; this despite the sizeable global stock market sell-off which would normally be expected to support the safe-haven Franc.

Safe-haven currencies usually strengthen in times of fear, such as the present, however this does not appear to be the case with USD/CHF which has risen due to the USD outperforming CHF – not the other way round.

White Oak Signs Agreement to Acquire LDF Group (Globe Newswire), Rated: B

White Oak Global Advisors, LLC on behalf of its institutional clients (collectively “White Oak” or the “Company”), announced today that White Oak has agreed to expand its asset-based lending platform to serve clients in the U.K. and Europe through the acquisition of LDF Group (“LDF”), a U.K.-based finance company providing asset finance, business loans, commercial mortgages and education leases to small and middle-market companies.  Established in 1986, LDF is an industry leader and one of the largest independent finance providers for small businesses in the U.K.

India

Faircent brings Shalabh Gupta on-board as national sales head – lending (The Siasat Daily), Rated: A

Leading Peer-to-peer (P2P) lending company Faircent on Thursday announced that the company has hired Shalabh Gupta as national sales head – lending.

As an industry veteran with over 17 years of extensive sales experience with brands like the Times Group, Reliance Capital, HDFC Bank, and ITC Limited, Shalabh will play a crucial role in furthering the company’s impressive growth plans and vision as a part of its leadership team.

Aadhaar-Based EKYC Limitations Cause Trouble For Fintech Startups (Ink 42), Rated: AAA

Since the Supreme Court extended the deadline for linking of Aadhaar to host of services, the fintech segment has been riddled with burdens of limited Aadhaar-based eKYC. The companies have been unable to access Aadhaar database for verification of their customers.

Impact Of Aadhaar KYC On Fintech Startups

According to reports, fintech startups across the insurance, lending and broking sectors are being denied access to authentication agencies for eKYC to verify customer antecedents on the Aadhaar database amidst rising concern over data privacy.

UIDAI revokes e-KYC services for some e-wallets, online lenders (The Times Of India), Rated: A

In a move that seems to have left fintech players scrambling, the Unique Identification Authority of India (UIDAI) revoked on Tuesday their access to a dozen agencies that provide e-KYC verification and authentication services. Some of these agencies – KUAs (e-KYC user agencies) and AUAs (authorised user agencies) – will no longer be able to provide e-KYC verification to onboard new customers or authenticate financial transactions affecting e-wallets, online lenders, NFBCs and smaller fintech players.

Africa

RainFin acquires stake in 4AX (Business Tech), Rated: AAA

Fintech company RainFin has announced the conclusion of a transaction with 4 Africa Exchange Proprietary Limited (4AX), which will see the company sell to 4AX its corporate debt marketplace, in exchange for a strategic shareholding in 4AX.

RainFin’s credit marketplace technology has been utilised by companies to raise debt funding from both tradition and non-traditional sources since its formation in 2002.

Accra, Ghana to Host 2018 Startupbootcamp Africa (Tech in Africa), Rated: B

Accra, Ghana’s capital city will host the forthcoming Startupbootcamp (SBC) Africa Accelerator program. The SBC sponsors include the Old Mutual, BNP Paribas, RCS, PwC, and Nedbank. During the event, startups present to the panelists for about two hours.

Authors:

George Popescu
Allen Taylor